Big retailers’ new alliances, online foes hurt Toys R Us
Bass Pro Shops, J.C. Penney among those adding toy offerings.
Want a train set with that designer gown? Or a teddy bear with your fishing gear?
This holiday season, shoppers won’t have to look far to find the year’s coveted toys, as retailers and toy makers forge unlikely alliances to win over consumers.
High-end department stores such as Bergdorf Goodman and Bloomingdales are selling toys by FAO Schwarz, while Bass Pro Shops is opening mini Build-ABear shops inside its sprawling outdoors goods stores. At J.C. Penney, shoppers will soon find Legos alongside racks of leggings.
“The holidays are hands down the most important time of year for retailers as we compete for every dollar leading up to Christmas morning,” John Tighe, executive vice president of J.C. Penney, said in a statement. “By partnering with a toy icon like Lego, J.C. Penney is well-positioned to capture a greater share of revenue within the toy industry.”
The alliances come as the toy industry digests the implications of a bankruptcy filing by Toys R Us ahead of the critical holiday season. Chief Executive Dave Brandon has sought to reassure shoppers that the retail giant will remain open as the chain works to restructure its finances — it’s even rolling out so-called “Play Labs” at select stores to let children try out hot toys. But that hasn’t stopped toy makers from fretting aboutwhat might happen if themajor distributor stumbles.
The toy chain has already struggled in recentyears tokeepupwith competition from Amazon.com, Walmart and Target, and those rivals showno signs of easing up.
“Toys R Us is getting crushed on both sides,” said Sucharita Mulpuru, an analyst for Forrester Research. “Not only is the competition online, but now you’re seeing department stores and specialty retailers encroaching on their space, too.”
Walmart thisweek announced that it is doubling down on the toy business by tripling its selection online. Thecompany will also host a series of toy “parties” at its stores Saturday, where it will encourage children to test out the season’s popular toys and take selfies with Santa.
Steve Bratspies, the company’s chief merchandising officer, said that the toy department is “really important” to the company because it “maintains a high level of engagement with the customer.”
“Toys are a tremendous traffic-driver during the holiday season, which iswhy all kinds of non traditional retailers are getting involved,” said CharlieO’Shea, an analyst for Moody’s. “But every time Bass Pro Shops orWalmart sells a toy — guess what, Toys R Us just lost a sale.”
Traditional retailers are increasingly adding toys to their holiday lineups, analysts said, because it can help bring in newcustomers — and their families — and persuade existing ones to pick up an extra item or twoduring shopping trips. Those impulse purchases could prove particularly important this holiday season, analysts said, as many big-name retailers struggle to swing a profit.